China opens clearing market for payment cards

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/23

Since ending UnionPay’s national monopoly on processing yuan-denominated electronic card payments last month, Chinese and foreign entities can now apply to the central bank for permission to engage in yuan payment processing. Among other things, qualified applicants must demonstrate registered capital of at least 1 billion yuan (€142 million.) and at least five years experience in banking or clearing activities. Foreign companies must establish a subsidiary in China. The PBoC and CBRC have yet to release detailed rules.

The value of bank and credit card payments last year increased a third from the previous year to 42.4 trillion yuan (€6 trillion). Electronic cards are now used in almost half of all retail sales in China, where 4.9 billion cards have already been issued.

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